Zara’s parent company, Inditex plans to invest €1.8 billion this year in store refurbishments, technology, and online platform improvements, maintaining its 2024 capital spending level.
Despite meeting analysts expectations and reporting 10.5 per cent in currency-neutral sales for the year to €38.6 billion, the company reported only 4 per cent growth in Q1, FY25 compared to 11 per cent growth registered a year earlier.
This slower start has raised concerns among analysts, who had predicted higher growth. William Woods, Analysts, Bernstein noted, despite Inditex reporting a 7 per cent sales increase in the most recent week, the company needs to accelerate significantly to meet expectations.
According to a few analysts, Zara's recent success may have been boosted by consumers trading down from higher-end brands during the cost-of-living crisis. Jelena Sokolova, Morningstar believes, this trend may not continue at the same pace.
Committed to profitable growth, Inditex reported a 9 per cent increase in net profit to €5.9 billion in 2024. Oscar Garcia Maceiras, CEO emphasized on the solidity of the company's growth.
The company continues to invest in logistics, with it set to open a new distribution center in Zaragoza this summer. Inditex also plans to open its first stores in Iraq. Its brand Bershka will launch in Sweden while Oysho will debut in the Netherlands and Germany.
